GNI confirms acquisition, clarifies status of new investors

Great Nigeria Insurance (GNI) Plc at the weekend confirmed earlier exclusive reports by The Nation that a new core investor had acquired 75 per cent majority equity stake in the insurance company.

The Nation had reported that Insurance Resourcery and Consultancy Services Limited (IRCSL) had acquired 75 per cent equity stake previously held indirectly by Wema Bank in a deal valued at N3.24 billion. A total of 2.87 billion ordinary shares of 50 kobo each of GNI were crossed in a single deal to Insurance Resourcery at N1.13 per share through the negotiated cross deal window of the Nigeria Stock Exchange (NSE).

At N1.13 per share, the transaction cost represents 126 per cent increase on the current market value of GNI, which has stagnated at its nominal value of 50 kobo per share. GNI currently has total paid up capital of 3.827 billion ordinary shares of 50 kobo each with a market capitalisation of N1.91 billion.

In a regulatory filing at the weekend, which confirmed the conclusion of the acquisition, GNI clarified that IRCSL is a special purpose vehicle representing a consortium of investors. The insurance firm did not however disclose the identities of the new investors.

GNI said the transaction value underscores its inherent value citing the company’s attractive real estate portfolio, debt-free balance sheet and long history as one of Nigeria’s oldest insurance companies.

Managing Director, Great Nigeria Insurance (GNI) Plc, said the conclusion of the acquisition would enable the company to focus on further unlocking its vast potential with a view to delivering better returns to shareholders.

According to her, the directors of the company would focus on consolidation of its market share in identified niche markets, excellent customer service, prompt claims payment and aggressive investment income to in the overall strategy to improve the company’s performance and increase shareholders’ return.

Apparently referring to its inability to meet the 20 per cent free float for its category of listing on the NSE, GNI stated that IRCSL was committed to maintaining the listing of the company on the Exchange, adding that there are ongoing discussions with appropriate regulatory authorities.

A report by the Exchange indicated that GNI currently has 16 per cent of its issued shares in the hands of the general investing public as against the minimum requirement of 20 per cent for its category of listing.

Following Central Bank of Nigeria (CBN)’s banking regulatory regime that required banks to either divest from non-core banking subsidiaries or form a holding company to hold those subsidiaries, Wema Bank had opted to divest from its non-core banking businesses including GNI. The bank had since divested from Wema Insurance Brokers Limited, Wema Registrars Limited, Independent Securities Limited and Whyte Cleon Limited. It also integrated operations of four subsidiaries into its core banking business including Wema Asset Management Limited, Wema Securities and Finance Plc, Wema Homes (Savings and Loans) Limited and Wise Properties Limited. Wema Bank had 100 per cent equity stakes in the trio of Wema Registrars, Wema Insurance Brokers and Whyte Cleon Limited while it had 94.7 per cent stake in Independent Securities and 75 per cent in GNI.